Nasdaq Target Area Reached

The buy signals we featured on the Nasdaq-100 in the posting "Shorts Beware: Nasdaq et al Showing Positive Divergences on Hourly" earlier this week have proven spot on. The index has rallied nicely since then and, in fact, it is trading perfectly in the middle of the target area that we had suggested.

Nasdaq-100 (NDX) hourly chart showing reaching of target derived from Fibonacci retracement area.

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Shorts Beware: Nasdaq et al Showing Positive Divergences on Hourly

Pardon me for the lack of blog postings for the past 4 or 5 days. I have gotten involved in a big side project at the last minute and between work on that project and the usual updates to the members area services, spare minutes have been in dearth. To add to matters, I'm in the process of moving house, as well! Anyway, things should be back to normal soon. With that admin note out of the way, let's get down to business.

It has been a good run for the bears. Our trading picks lists are chock full of big winners. But the "easy" part of the decline may be over for now. We're not quite ready to get bullish as yet, but we are on the lookout for a bounce, which we'd use to book profits on shorts and perhaps, once such a bounce has taken place, look to re-enter new shorts, before any next leg down.

This pause comes from a viewing of the daily chart, which shows prices at a flat lower bollinger band, and of the hourly chart, which as you see (below) is showing buy signals.

Nasdaq-100 Hourly Chart Showing Positive Divergence on MACD

NDX has reached support at 1660 as of this morning. So far, support has held up quite well. With RSI at an oversold reading and, more significantly, MACD showing a potential positive divergence, the odds are pretty goo that a bounce will take place. As far as the size of such a bounce, we'd be look at the 38%-62% Fib zone (1705-1732) of the recent down-leg, as our primary target area.

Note that the presumption of a bounce depends completely upon the continued legitimacy of support at 1660. If that level is broken, the downtrend could resume imminently.

Rising Channel on S&P-500 Hourly Chart (Final Update)

Despite a brief move back into the rising channel, mid-day on Wednesday, the S&P-500 has now clearly obliterated the rising channel that had been present on the chart since early-Oct. As such, we will have a new 'Chart In Focus' following this update.

S&P-500 hourly chart showing broken rising channel and negative centerline crossover on RSI

As you can see, the index was able to find support at around 1087 late on Tuesday and was able to climb back into the broken channel mi-day on Wednesday. In fact, given the channel lines had risen considerably, the index even moved to a marginally higher new high on the minor trend, at that point.

The index consolidated at those levels until...

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Rising Channel on S&P-500 Hourly Chart (Update 5)

The rising channel on the hourly chart of the S&P-500 has finally broken and there are a potentially a couple of other sell signals on the chart as well.

Hourly chart of S&P-500 showing rising channel (now broken)

As the chart shows, the index broke the lower line of the channel, early on Tuesday and then proceeded to consolidate at a short distance below the lower line. This break can be looked at as an initial sell signal on the minor trend. The sell signal will remain in place if and only if prices remain below the lower line henceforth.

Additionally,

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Rising Channel on S&P-500 Hourly Chart (Update 4)

The rising channel on the hourly chart of the S&P-500 still lives and, as such, the chart continues to be our current 'Chart In Focus.'

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Rising Channel on S&P-500 Hourly Chart (3)

The following is another update to the current 'Chart In Focus.'

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Rising Channel on S&P-500 Hourly Chart (2)

We introduced the hourly chart of the S&P-500, which is showing a rising channel, as the current Chart In Focus, yesterday. The channel hasn't been broken as yet, but we'd be quite surprised if it didn't do so soon.

It certainly would be a surprise if the breakout is actually the upside, but with the multitude of gaps below, surely - one would imagine - a break of the lower line of the rising channel is on the cards at some point.

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Rising Channel on S&P-500 Hourly Chart

Yesterday, in the posting titled "S&P-500 Set to Make New Minor Trend Highs, But...," we spoke about an apparent rising channel and a handful of troublesome gaps, on the hourly chart of the S&P-500.

Today, the chart becomes our current 'chart in focus' because the index stopped exactly at the upper line yesterday and if resistance is met with at the top end of the channel, there could be a testing of the channel support line soon. Traders will want to focus their attention on the support line if/when prices reach that level (1078 and rising, at this point). A break of said line would be the first sign that the index is ready for another small correction (at least).

S&P-500 hourly chart featuring rising channel and gaps

We also spoke about gaps in yesterday's intraday market commentary article. Yet another gap was left on the charts at the open yesterday. This is just a 'no can do,'

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